Category: Archived Posts

by Brian de Lore
Published July 2017

“We are quite happy to allow planning processes to go on forever. It’s not the big that eats the little; it’s the fast that eats the slow.”

They were the frustrated words uttered by Employers and Manufacturing chief executive Kim Campbell a few years back when asked what it was that impeded the Kiwi psyche in business.

Campbell’s statement could be related to the psyche we have in New Zealand racing governance today: – “happy to allow planning processes to go on forever,” followed by a racing industry that continues to contract and disillusion the bulk of its participants.

The brief history goes like this: racing was doing fine until the late eighties. The economic crash of 1987 followed by the internet and technology revolutions in the 1990s brought globalisation, and since then we have been gradually losing ground.

The clubs started the TAB in 1951, but before long the Australians came, looked and copied the model before opening the Victoria TAB in1961. Their prolific betting, larger population (They bet A$2.10 per head for every NZ$1.00 we bet) soon produced higher revenues, superior betting services and consistent, sustainable profits for a healthy racing industry.

Then the big game-changer occurred in 1993 when the Northern Territory state government licensed Sportsbet, the first non-government organisation allowed to provide betting services in Australia. Three years later Centrebet became the first company to offer online betting – the tide had turned.

Dwindling race crowds and on-course betting occurred concurrently in the late 1990s with a burgeoning online betting industry. Then the Australian government stepped-in with the Interactive Gambling Act of 2001.

The Act served to rein-in the online bookmakers’ free-for-all which had been tolerated until that time with strict rules and guidelines, but then further game-changers occurred in 2007 and again in 2010 with the respective introduction of smart-phones and iPads/tablets.

As technology advanced, more online bookmakers arrived, necessitating the drafting of race fields legislation to force them to give something back to racing. They were hurting the tote and paying nothing for the use of the race fields.

Sportsbet and Betfair contested the legislation in the High Court, and after dragging it through the legal mire for four years, a landmark ruling was delivered in March 2012 in favour of Racing NSW. The 1.5 percent of turnover that had been held in trust for those four years amounting to over A$100 million was freed-up to allow Racing NSW CEO Peter V’landys to announce infrastructure improvements and massive prizemoney increases for the state.

The door was now open for New Zealand to follow but, more than five years on, we are still writing the legislation for our race fields. That Kiwi psyche kicked-in, we were slow leaving the barrier and have continued to fall further behind our counterparts across the Tasman.

My reasoning for regurgitating this 25-year history is to emphasise how much the game has changed and then to contemplate the doubling of that amount of change over the next 10 years. That’s where technology is taking us – a place unknown.

Meanwhile, it may be this time next year or even further down the track before the race fields legislation goes before parliament and undergoes three readings and is then is passed into law. Presently it’s in draft form only, still requiring fine tuning, and from what the writer has learned is ‘low priority’ from a government viewpoint.

The racing industry viewpoint is racefields is ‘high priority’ because for each year that flows by without it being passed into law it costs gallops around $10 million that would go straight into stakes money.

And that $10 million is potentially $20 million annually because at present Australians betting on NZ racing represents only 3.2 percent of their turnover.  Unlike harness (6.7 percent) and greyhounds (6.5 percent), the gallops have been poorly marketed across the ditch and so the potential to double the percentage, given its exclusive time zone, is a very real one.

Aside from race fields which John Allen promised us in this session of parliament in his February ‘talking to the industry tour,’ the fixed-odds betting platform which is part of the $60-75 million the NZRB is spending and which was promised for early next year, is unlikely to arrive before the start of the 2018/19 season.

Late last week in a call to NZRB Head of Communications Kate Richards, she said: “The FOB platform has been agreed to in the partnership with Open Bet and Paddy Power, but it’s impossible to say how long it will take to implement – current estimation is that it will start in the 2018/19 season. The Board has approved the partnership to start the process.”

Does the time-frame blow-out also mean a budget blow-out? Cynicism for that comes from the perusal of annual reports, statements of intent, and budgets released by NZRB over the past six years that show a series of underestimated costs and over-stated returns.

For example, in the NZRB Annual Report for the year ended July 2012, the budget for employee expenses was $43,660,000 following the previous year’s actual of $41,149,000. But the actual for 2012 blew out to $47,155,000 – $3.5 million over budget.

Between 2012 and the year ended 2016, total revenue for the NZRB increased by over $50 million ($301,881,000 to $351,923,000), yet the thoroughbred industry stayed ‘flat-lining’ in terms of its returns. Why? Simply because costs at NZRB were and still are spiraling.

Is this the reason, or one of them, that prompted NZTR Chairman Alan Jackson to write the following in the Chairman’s Annual Report published in the November 2016 Thoroughbred Monthly?:

“Looking forward, there is only so much more running to stand still the Code can sustain. We cannot have another financial result like the current one, and we cannot simply continue to reduce the number of meetings and races to raise stakes.”

As stated here previously, the wages bill has now soared to $66,824,000 as per the P&L of the NZRB Financial Statements for the year ended 2016. Unacceptable in a public company environment, the difference here is that the NZRB came into being as a result of a now completely outdated Racing Act of 2003.

The Act and especially clause 16 is probably some of the dumbest legislation ever passed. It gives the NZRB ‘carte blanche’ on how much they return to the codes with no accountability on their costs. It was written by the bureaucrats for the bureaucrats and has placed us where we are today.

Back to the governance of racing, it’s not the fault of the NZRB but the government of the day and the legislation they passed that has put us in this hole. The NZRB comprises a group of people that don’t have their livelihoods at stake in racing because they are mainly corporates, marketing, and IT people whereas the NZTR is in the main body with a vested interest.

Ironically, the people at NZTR didn’t want to talk to me for this story, but the NZRB obliged.

But it’s the NZRB that’s setting off down the path to building its own FOB platform and an app for smart phones, all at considerable costs in a world that will continue to leave them behind in technology.

With at least 12 major bookmaking companies operating on Australian racing, some of which spend $120 million annually on IT to retain or gain market share, how could we believe the NZ TAB could be competitive long term.

Tabcorp recognised some time ago that scale was required to compete against the bookmakers. It’s now a massive, integrated betting organisation that supports all forms of wagering and is the rock that provides revenue for racing.

Tabcorp is currently in the process of taking over Tatts (Ubet) which is the Queensland equivalent of our TAB. They have signed a deal which now only requires ACCC approval for the corporate merger. The deal will strengthen Tabcorp and save Queensland racing hugely in annual expenses.

Tabcorp services also includes retail, digital and sky media platforms – their strength provides stability for a strong Australian industry. Scale gives them competitiveness in today’s globalised wagering business which gives better service to punters and more back to racing.

So why is the NZRB going it alone and risking massive capital to develop its own technology to compete against Tabcorp and the bookmakers who possess far bigger scale and budgets?

The reason New Zealand doesn’t have its own banks is simply a consequence of scale. We are not large enough to go it alone when the market is global.

Why wouldn’t they instead outsource all our betting services to Tabcorp and became part of the scale that would provide more certainty for our racing future? The answer may be in the DNA of the NZ psyche previously mentioned.

Outsourcing to Tabcorp would provide $50 million to $70 Million of savings over three codes in annual expenses. Those savings would transform racing in New Zealand as we know it. But the catch-22 is that most at NZRB would lose their jobs because that’s where the savings lie.

Instead, the racing business is all-aboard the Titanic and heading into the North Atlantic knowing there are icebergs to negotiate?  And is the NZRB the band that continues to play while rearranging the deck chairs?

Maybe it’s not too late to head back to port to replot a safer course?

by Brian de Lore
Published 19 May 2017

Should everyone in racing should stop what they’re doing, take a deep breath, and carefully read part of the Racing Act 2003?

Look in the section which says ‘Functions of the Board,’ the very first clause directly below that heading reads as follows:

1(a)
“to develop policies that are conducive to the overall economic development of the racing industry, and the economic well-being of people who, and organisations which, derive their livelihoods from racing.”

Clause 1(a) was a statement of intent that was ratified by the then government and passed into law along with the rest of the act. It was a Racing Act that promised much but in 14 years has delivered little for the people at the ‘coal-face’ in racing. In short, it has been a huge ‘fail.’

Along with the Act came the formation of the NZ Racing Board to carry out function 1(a) and the others listed below it. It is true that the Board has ‘developed policies’ over those 14 years but where is the evidence of the ‘economic development of the racing industry’ or the evidence of the ‘economic well-being of the people or organisations’ in it.

There is no evidence. It has not happened!

The racing industry needs to have a long hard look at itself and admit that’s it’s now wallowing in its own horse manure, and it needs to rid itself of the denial and the apathy that’s endemic in it. It needs to wake up to itself!

It’s not good form to be negative, but denial of the truth is the cancer that needs to be ‘cut off at the pass.’ Why, because in the 14 years since the Racing Act of 2003 came into being, and the NZRB, the cost of running racing has soared to ridiculous heights as a percentage of its turnover.

In its current form racing in New Zealand is not sustainable. We have to change, and it must be soon. The cash generated by the industry stays at the top and is eaten-up by costs and salaries, and there’s too little trickle-down revenue for the people at the bottom of the chain – the owners, the trainers, the jockeys, the stable workers, etc.

If you go to the NZRB website, it says it employs 820 people both full-time and part-time. Yes, many of those are involved in the TAB and its TAB Trackside channels, but it is still a fact that there are 138 people employed by the NZRB that earn $100,000 or more. The total wage bill is $66 million.

Does anyone need reminding that Haf Poland once ran racing and the stud book with only a dozen employees?  Yes, these are different times and comparisons like that are futile, but it’s worth emphasising how far in one direction we have now gone in the other.

Recent announcements of the minimum stake going to $10,000 and the extra $24m for the three codes over the next two seasons deserved a round of applause. Racing badly needed a shot in the arm like that but from where does the revenue for the increase come?

It’s reliant upon future increased income from NZRB projects including the race fields legislation and a successful launching of the new fixed-odds betting platform – and it becoming a success.

So, the NZRB have allocated future race prizemoney increases on ventures they don’t know will work. The word on the race fields legislation has gone from confident to hopeful, and now the latest information suggests it will not be tabled in the term of this government.  

The election will come first. So when will it be tabled, debated and then passed? No-one knows; perhaps next year, but we are already spending the ‘anticipatory’ future profits on increased prizemoney which we haven’t yet earned.

Post-election race fields may come before a new coalition government, but regardless, I repeat, we are already allocating prizemoney we haven’t got. That might result in a deficit of millions at the end of next season which would ultimately be levied against and eventually clawed back from prizemoney.

The increased prizemoney announcement was $24 million for two years across the three codes but what happens after that if losses are incurred in successive years?

Don’t forget that the people who ‘develop the policies’ will still collect salaries regardless of performance and even if they ‘get fired out-of-the-place,’ the severance packages will be significant.

Now, if you were the shareholder in a company that used that ‘mode-of-operandi,’ would you be keeping your shares – I think not?

The real problem is the monster the Racing Act 2003 created rather than the quality of the people at NZRB. In what they may be genuinely trying to achieve they can never get scale on the operating costs.

International competition is a big problem for little old New Zealand – as small fish how do we now compete in a big pond? We have only a tiny pool of betting money by comparison, and it’s impossible – in this business the little guys don’t win.

Once upon a time, the New Zealand TAB was safe within a domestic market, but now we have no choice but to compete globally. Everything is global.

In Australia, Crown Bet and Sportsbet spent $60m and $40m respectively on advertising for customer recruitment alone.  How does New Zealand compete? Each spends around $120m a year on their IT development – we are doing a one-off project to develop a smart-phone app which won’t be launched until next year, and we are not spending anything on the tote.

Returns from the tote are just as important as the fixed-odds, and what might be gained from the new fixed-odds betting platform may be lost from tote betting –the net result may be a ‘standstill.’

Kiwis don’t have the discretionary money to bet more – the wealth isn’t here to do it. Further, when race fields legislation does eventually arrive punters are going to be more aware of the offerings in Australia, and they will become genuine competitors – a recent promotion in NSW TAB betting was the offering tote plus 20% for the first four races.

When John Allen toured the country in February and said he was going to double the number of TAB account holders; what he really meant to say was he wanted to reignite the betting of half the account holders that hold dormant accounts with only a 10 or 20 cents balance.

But that’s not possible. Punters run their balances down to nearly zero or draw money from them when things are tight. Some of those accounts may not have been used for years, or those punters might now be betting off-shore.

So, the real question to be answered is this:  Is the NZRB looking at sustaining themselves or the racing industry? Nothing is trickling down to the bottom rung of the ladder and after 14 years – the money is being ‘used-up’ at the top.

Historically, there is only one conclusion to be drawn.

With race fields not a goer in the short term and the scale against their other projects, the NZRB strategy is high risk. Do all the codes fully understand this because nothing is voiced – the racing bodies are quiet and especially Harness and Greyhound.

To put an election slant on the future of racing, I this week attempted to contact Winston Peters who to date has been our most successful racing minister. So far no luck but I’m not giving up on him.

How would Winston view the racing industry if he were in a position to form a coalition government?

Three attempts to phone NZRB’s Kate Richards at John Allen’s office to draw comment on the delay of race fields all failed. No answer and no return from the answerphone message.

Better luck with the NZTR when tracking down Chairman Alan Jackson at the airport in Melbourne.

Jackson said that the appointment of Bernard Saundry as a replacement to the outgoing CEO Alan Purcell was a step in the right direction and he would be an asset for New Zealand racing.

“Bernard had done this journey before, explained Jackson. “When he joined Racing Victoria they had a poor payout and were $48 million in the red – he turned them around.

“Here’s a guy who has dealt with race fields, knows how to price a product; he knows the importance of the thoroughbred getting its best opportunity in Australia.

“He’s got very good relationships with all the organisations in Australia – we can start to address issues like strengthening our organisations, clarifying marketing and providing good support to the infrastructure.

“He has done this work before and very successfully – he has worked with metropolitan clubs, regional clubs and community clubs – everything’s got a place and we may conclude that some clubs may not have a stand-alone place for the future.”

That was an interesting comment from Jackson, suggestive that the arrival of Saundry might coincide with some long, overdue industry rationalisation. It was indicative that the racing industry was at the very least heading for some rejigging.

“Bernard is a shining light,” continued Jackson. He possesses knowledge which will be very beneficial going forward.”

Are Your Horses Getting Enough Sleep?

by Brian de Lore
Published 23 December 2015

With two Premier race days at Ellerslie followed by two more at Trentham, the annual mid-summer migration of racehorses targeting feature races is about to commence.

Horses will converge on those centres from the deep south, the far north and everywhere in between. They will arrive after a rigorous preparation, perhaps a very long float trip in heat and then before stabling in unfamiliar surroundings.

The question begs, will that combination of circumstances affect some horses sleeping patterns and as a consequence their performances? Race form results from a delicate combination of fitness, luck and numerous other incidentals, and sleep deprivation is not just an equine reality, but a factor never considered.

Considering the significant advancements in veterinary science, the science of feeding, training methods and computerised analysis of performance in the past 30-odd years, it’s a wonder so little is still known about a thoroughbred horse’s sleep requirements and how it may affect performance on the track.

Several studies in the USA and Europe have been conducted on horse sleeping patterns but not specifically thoroughbreds. As in humans, experts have determined that some horses suffer from sleeping disorders.

 Unlike humans, horses are considered ‘cathemeral’ which means they are neither nocturnal nor diurnal but do a mixture of sleeping and waking in both daytime and night-time hours. Evolved from animals of prey, the horse has a well-developed instinct to ‘take flight’ if danger threatens.

That’s why they can sleep standing up. In the stable resting in the ‘stay apparatus’ position, usually with the head pointed towards the stable door, a horse will rest his muscles, reduce fatigue and doze off. It’s not a deep sleep, but if danger threatens, nature has readied it for a quick escape.

Dr. Joe Bertone, DVM, MS, Dipl. ACVIM, professor of equine medicine at Western University of Health Sciences’ College of Veterinary Medicine in Pomona, California, describes this state as ‘diffuse drowsiness’ which is the first of four phases of sleep characterised in horses.

Diffused drowsiness is associated with the horse standing square, head and neck slightly lowered, the lower lip drooping and the ears and eyelids relaxed.  “The next phase is the ‘intermediary,’ and then there is ‘slow-wave’ and ‘paradoxical’“ says Dr. Bertone in his journal, conducted from research carried out in the 1960s and 70s. 

”In the intermediary phase, just before lying down, horses become alert and examine their environment. Then they lie down if they feel safe enough to do so. Once lying down, horses experience diffuse drowsiness again and if at ease with their surroundings, enter into slow-wave sleep. 

“When drowsy, horses often lie sternal (on their abdomen with tucked-under legs) with their head slightly raised; they can be easily aroused from their slight slumber at this point. In general, horses will then lie on their side to move into slow-wave sleep. 

“Importantly, paradoxical sleep requires a horse to lie down because all muscles relax,” says Bertone. During this phase, rapid eye movement (REM) sleep occurs, and the horse’s brain is very active, but he is essentially paralyzed; he generally remains in the sternal position, but moves his head to the side and to the ground to remain propped up

“Most of this sleep is amassed by ‘nickel and diming,’ meaning horses can snooze for short periods—about 15 minutes at a time. Those minutes all add together to comprise that overall sleep total. Horses can go weeks without a full sleep cycle when needed, however, which is in direct contrast to humans who require prolonged periods of undisturbed sleep to function optimally.”

In a separate paper, Dr. Bertone concluded that horses on a daily basis needed approximately two hours of diffused drowsiness, three hours of slow-wave sleep and less than one hour of paradoxical sleep. But he did qualify this assessment by explaining:

“Horses can go for days without holding to this pattern. That makes evolutionary sense since horses were a migratory species. Having to take a nap may have made you someone else’s dinner.” 

Two researchers in Germany at the Veterinary Faculty of the Ludwig Maximilian University, in Munich, confirmed that horses do experience these four distinct sleep phases, and each phase is short and frequently interrupted by waking phases.

Researchers everywhere agree that at some stage horses must lie down to go into a deep sleep. Standing sleep will benefit the horse, but it’s only a snooze. Like humans and other animals, horses need to experience slow-wave sleep (SWS) and rapid-eye-movement (REM) deep sleep.

 So what does all this mean to a New Zealand horse trainer? The issue seems to be the overall wellness of the horse rather keeping tabs on the sleeping hours.

 “I would often go back to the stable at nine or 10 pm and find some would be laying down sleeping and some would be standing, said former leading trainer Jim Gibbs from Matamata this week, “and if you made a little noise it would be the ones standing that would wake or get a little fright or wake.

 “The relaxed horses would be laid-back snoring, and then you’d get one with a really good temperament and he might be so relaxed he might have to be coaxed quietly up in the morning. 

“Horses do a lot of travelling – the greatest thing for some horses is to have a trip away. Sometimes going away for the first time they might not feed that well, but the next trip away could be the making them.”

 “But when we travelled horses long distances we’d go early and spend a night before the races and then a night afterward.

 “Bill Ford used to say that a trip away could make the horse and he might move up two or three grades straight away, but I’m not in favour of doing a five hour trip to the races, as they do to Ruakaka, and then back again in the same day – I think that’s too stressful.

“On a sunny day, horses in a yard or paddock love to lay down and have a sleep. They stretch out and really enjoy the moment – wonderful to see,” Jim enthused. You know yourself that if you can’t sleep you’re in trouble so horses will be the same.”

Taranaki trainer John Wheeler admits: “I don’t know very much about horses sleeping patterns except that young horses, especially two-year-olds after the first couple of gallops can get very physically tired; they’ll be stretched right out in the box sleeping it off. But I haven’t noticed any problems with older horses.

 “When I worked for Cummings he was very big on letting horses rest during the day and not disturbing them just like Chris Waller is now. Horses need space and can have too much human intervention. Bart didn’t like the staff spending too much time on the grooming – he used to say ‘grooming only wins owners, it never wins races.’ “

 “I haven’t detected horses being short of sleep, but I can tell you that horses definitely dream,” he added.

Pukekohe trainer Nigel Tiley says he’s aware of his team’s sleeping habits by checking the boxes in quiet times:

“I check the horses daily for behavior and can tell which horses have been laying down to sleep, says Tiley. “Some stand up and sleep, and you always know when your babies are growing because they lay flat out, stretched right out in the box. 

“Our staff depart the stable at 10 am and don’t return until 3 pm, and it’s between those times they are resting. If I had cameras on them, I would have the definitive answer but doing the rounds and knowing your horses will alert you to any change of behavior.

“On a trip to Trentham, we’ll load up at 2 am, stop briefly at Wairakei and then we’ll carry on down and get to Trentham just after lunch. We put them into yards, and then we take them for a pick about 5 pm. So far I have never detected that some horses are more affected by the trip than others.”

In conducting his research in the USA, Dr. Bertone challenged horsemen by asking if they knew how much sleep their horses were getting. The question was no doubt, purely rhetorical and one that didn’t draw a relevant response.

If the same question were asked of all trainers in New Zealand, it would likely also draw a blank. Perhaps we should talk to the wives to glean the material for a follow-up story – “Is Your Trainer Getting Enough Sleep.”

by Brian de Lore